Water scarcity is no longer a distant threat.
The Economics of Water Scarcity: A Conversation with Dr. Xavier Leflaive
It is an economic, environmental, and social challenge shaping the future of every community and industry worldwide. In this episode of the Allianz Water Expert podcast series, Michelle Brogan speaks with Dr Xavier Leflaive, Principal Administrator at the OECD Environment Directorate, about how climate change, land use, and policy decisions are transforming the global water cycle.
Dr Leflaive, who has spent two decades advising governments around the world on sustainable water management and climate resilience, shares insights from his work on the OECD Council Recommendation on Water and The Economics of Water Scarcity. He explains how droughts and floods are part of a larger hydrological imbalance, why keeping moisture in soils is key to stabilising the climate, and how economic policies, nature-based solutions, and better governance can help secure a sustainable water future.
Tune in now to discover how rebalancing the water cycle could be the key to strengthening both our environment and our economies.
Dr. Xavier Leflaive – Climate Adaptation & Sustainable Water Management Expert
Dr. Xavier Leflaive is Principal Administrator at the OECD Environment Directorate, specialising in resilience, climate adaptation, and sustainable water management. He advises governments on financing and implementing nature-based solutions and climate-resilient water infrastructure across Europe, Asia, Brazil, the Caucasus, and Central Asia. Author of influential reports including The Economics of Water Scarcity and Trends in Water-related Technological Innovation, Xavier also teaches global water governance and finance at Sciences Po in Paris.
FAQ: The Economics of Water Scarcity
The OECD is an international organisation that helps governments design better policies. Its Environment Directorate supports sustainable water use, climate resilience and nature-based solutions across member countries.
Extreme weather events that once happened every century now occur every few years. Climate change has disrupted rainfall patterns, making droughts drier, floods stronger and water flows more unpredictable.
Water supports almost every sector. Agriculture uses about 70 percent of global freshwater, while industries like microchip production also depend on large volumes. When water runs short, food supply, trade and prices can all be affected.
Hotter temperatures cause soil moisture to evaporate faster. This dries out land, increases flood risk and weakens the soil’s ability to store carbon. Keeping moisture in the ground helps stabilise both climate and water systems.
Forests and wetlands hold water in the ground, but when replaced by cities or farmland, that moisture disappears. Greener urban design with parks, trees and permeable surfaces helps restore natural water balance.
Ignoring water risks can disrupt farming, energy and manufacturing. Shortages also drive inflation and threaten global supply chains, making water scarcity an economic as well as an environmental issue.
Governments can reward water efficiency and integrate it into city and farming plans. Households can conserve water, reuse where possible and support companies or policies that protect freshwater sources.
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